Nordstrom dives 28% as higher labor costs and low inventory at Nordstrom Rack lead to quarterly earnings miss

People in Chicago.

Scott Olson is a photographer.

The upscale retailer's stock plummeted after third-quarter earnings missed expectations as it struggled with rising labor costs and soft inventory levels at its Nordstrom Rack unit.
The company's earnings were less than analysts had anticipated, with earnings of $0.39 a share. Wall Street had projected revenue of $3.54 billion.
During premarket trade, shares sank as much as 28%. Through Tuesday, the stock had risen by 2.3%.
The financial targets it made earlier this year are on track. "When we look across the landscape, we need to deliver more and increase market share while delivering greater profitability," said the CEO during the company's earnings call late Tuesday.
The company said selling, general and administrative expenses as a percentage of net sales increased due to labor cost pressure and leverage on higher sales.
Sales at the discount store rose to $1.19 billion from a year earlier, but were still 8% below pre-pandemic levels seen in the third quarter of 2019. The company said that it was challenged by low inventory levels in key categories such as women's apparel and shoes.
The fiscal 2021, including retail sales and credit card revenues, will increase by more than 30% compared with fiscal 2020. Macy's last week raised its yearly outlook, despite the fact that Nordstrom backed its view.

Business Insider has an original article.